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    Supervalu Amends Revolving Credit Facility

    Action reduces interest rates

    By Jim Dudlicek, EnsembleIQ

    Minneapolis-based Supervalu Inc. has completed the repricing, amendment and extension of its existing $1.0 billion asset-based revolving credit facility, which is secured by the company’s inventory, credit card and certain other receivables and certain other assets.

    Supervalu's amendment reduces the facility’s interest rates to LIBOR plus 1.50 percent to 2.00 percent and prime plus 0.50 percent to 1.00 percent, depending on utilization. The amendment also eliminates the springing maturity provision that would have accelerated the revolving credit facility’s maturity to 90 days prior to May 1, 2016, if more than $250 million of the company's 8 percent senior notes remained outstanding as of that date.

    Expands Ability to Increase Term Loan

    The springing maturity provision was replaced with a springing reserve provision that calls for a reserve to be placed against availability under the facility in the amount of any outstanding material indebtedness (as defined in the credit facility) that is due within 30 days of the date the reserve is established. In addition, the amendment also expands the ability to increase the company’s $1.5 billion senior secured term loan facility, subject to a secured leverage test, by up to $500 million (previously $250 million), subject to identifying term loan lenders or other institutional lenders willing to provide the additional loans and the satisfaction of certain terms and conditions. The amendment also contains modified covenants to give the company additional strategic and operational flexibility and includes certain other non-material changes. Additionally, the maturity date of the revolving credit facility was extended by 11 months to February 2019.

    Wells Fargo, U.S. Bank, Rabobank, Goldman Sachs, Credit Suisse, Morgan Stanley, Barclays and Bank of America Merrill Lynch acted as joint lead arrangers and bookrunners on the amendment.

    Supervalu Inc. operates a network of 3,358 stores composed of 1,834 independent stores serviced primarily by the company’s food distribution business; 1,334 Save-A-Lot stores, of which 954 are operated by licensee owners; and 190 traditional retail grocery stores.

    By Jim Dudlicek, EnsembleIQ
    • About Jim Dudlicek As editor-in-chief of Progressive Grocer, Jim Dudlicek oversees daily operations of the magazine, spearheads its signature features, produces PG’s monthly Trend Alert newsletter on center store issues, moderates its regular webcast series, and writes and comments about a wide range of grocery issues. A food industry journalist since 2002, Jim came to PG in June 2010 after covering the dairy industry for 7½ years, during which time he served as chief editor of Dairy Field and Dairy Foods magazines. A graduate of Marquette University, Jim is fascinated by how truly progressive grocers inspire consumers to enjoy food, transforming the industry from mere merchants into educators that can take the most basic of all necessities and turn it into something profound and life-enhancing.

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